Technology stocks continued falling Monday, pulling the Nasdaq Composite into correction territory, as a selloff in U.S. government bonds extended into a sixth week and sapped demand for the once highflying shares.
The S&P500 index continued to trade above thee 3800 level. If the index drops below it in the coming sessions, the next support will be around 3700 area. Dropping below it will open the door for additional 4%-5% drop.
The Nasdaq index continued to drop today closing the session -2.92%. The index futures are currently sitting on the 12300 support. If they drop below this level overnight, expect more selling tomorrow.
After today’s session, Nasdaq continues to be in a DOWNTREND on the monthly, weekly and daily timeframes. Dow Jones, on the other hand, flipped UP on all three timeframes. Very unusual situation, which continues to point to a massive rotation out of tech into energy.
Nasdaq: Monthly, Weekly and Daily Heikin Ashi Charts
S&P500: Monthly, Weekly and Daily Heikin Ashi Charts
Russell: Monthly, Weekly and Daily Heikin Ashi Charts
Dow Jones: Monthly, Weekly and Daily Heikin Ashi Charts
TECHNOLOGY SECTOR – WHEN WILL CORRECTION END?
If Nasdaq drops below the 12300 support tonight / tomorrow, the next big support is located at the 11000 level, which is -10.5% below today’s close. Should NDX drop all the way to 11000, it will formally enter into a bear market territory (-21%). That’s when panic might finally set in and the 11000 level might offer some decent buying opportunities in the tech sector.